Edelweiss Group on Sunday once again defended itself from criticism in the Nitin Desai suicide case, saying that mounting recovery efforts from defaulters is not just a right, but an obligation of creditors.
Acknowledging that its Chairman and Managing Director, Rashesh Shah, has been named along with four others in the first information report (FIR) in connection with the art director’s suicide, Edelweiss Financial Services maintained that it did not put any “undue pressure” on Desai.
Desai, whose company had defaulted on a ₹252 crore debt and had failed in securing any relief from the bankruptcy courts against insolvency proceedings, is alleged to have committed suicide last week. He was found dead at his studio in Karjat.
The Edelweiss statement said group companies ECL Finance, which had first extended the loans, and Edelweiss Asset Reconstruction Company, which later took over the loan for resolution, acted in accordance with the law in letter and spirit and also RBI regulations.
The regulations prescribe that “pursuing recoveries on NPA accounts is not just a right of creditor but also an obligation”.
“At no time was there any undue pressure being put on the borrower for recovery,” it added.
Reiterating that the interest rate charged by ECL Finance was as per prevailing market rates, the statement from the listed entity pointed out to the sequence of events with the borrower.
Loans of ₹185 crore were given to ND’s Art World Pvt Ltd in 2016 and 2018 towards capital expenditure for the theme park and partly for repayment of existing debt, general corporate purposes and working capital needs, it said.
“In view of this recent development [the FIR] and the media articles, we would like to place on record the following facts, which will establish that there was no wrongdoing of any nature,” the statement said.
Deputy Chief Minister Devendra Fadnavis last Thursday told the assembly that investigators will probe whether Desai was charged high interest for the loan and if he was under mental stress.
Edelweiss reiterated that it was deeply saddened by the events and would cooperate fully with the investigating authorities. “We also hope that the [investigation] process will help everybody find closure on this tragic event,” it said.
● Group defends itself from criticism
● Mounting recovery efforts from defaulters obligation of creditors
● Rashesh Shah, four others named in FIR
● Edelweiss says no ‘undue pressure’ on Desai
● Desai’s company defaulted on Rs252 crore debt
● Failed in securing relief from bankruptcy courts
● Desai found dead at his studio in Karjat
● Interest rate charged by ECL Finance as per prevailing market rates
● Loans of Rs185 crore given to ND’s Art World Pvt Ltd in 2016, 2018